As Catalans push for independence, spain rejects mediation

As the European Union urged dialogue to ease the standoff between separatists in the northeastern region and Madrid, Catalan leaders said they could unilaterally declare independence as early as Monday.

The tone of the crisis sharpened with Catalonia's president denouncing the king's intervention and Spain's government rejecting any possible talks. "The government will not negotiate over anything illegal and will not accept blackmail," said a statement from Prime Minister Mariano Rajoy's office.

The dispute is Spain's worst political crisis in decades and images of police beating unarmed Catalans taking part in Sunday's banned independence vote sparked global concern. Catalonia's regional president accused Spain's King Felipe VI on Wednesday of "deliberately ignoring millions of Catalans" by urging the region to end its bid for independence. Catalonia's president Carles Puigdemont called the central government's policies "disastrous" as the region's leaders pushed on with its bid to break away from Spain, angering Madrid and raising the risk of further unrest.

Spain's key IBEX 35 stock index plunged by more than three percent Wednesday in the ongoing turbulence, with some big Catalan banks down more than five percent.

"Political risk is back on the agenda in Europe," NFS Macro analyst Nick Stamenkovic told AFP. After meetings in the regional parliament on Wednesday, pro-independence lawmakers called a full session next Monday to debate the final results of the vote.

"According to how the session goes, independence could be declared," a regional government source told AFP, speaking on condition of anonymity.

Mireia Boya of the radical leftwing separatist CUP said it would be "a plenary to proclaim the republic" of independent Catalonia. King Felipe VI on Tuesday branded the independence drive illegal and undemocratic, throwing his weight behind the national government.